What European Austerity?

by Eric T. Phillips

Keynesians in the U.S. have been breathlessly repeating that savage austerity programs in Europe are dragging that continent into depression. If the Europeans would only increase spending, inflation, and debt, the argument goes, their economies would be stimulated and the Euro zone would be saved.

The problem is, the spending cuts that the Keynesians decry are virtually nonexistent. Greece, Spain, and Ireland have slightly reduced their budgets relative to 2009 levels, but overall spending is up 3.4% in the European Union as a whole (27 countries) and is up 1.8% in the Euro zone specifically (17 countries).

Russ Roberts crunches the numbers.

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